Features of Company

A company is a form of business organization which is separate from its owners and it is formed by association of persons who have common interest. Given below are some of the features of company –

  1. It is considered in the eyes of law as separate legal entity which is capable of taking decisions and be responsible for such decisions. Hence it can sue other parties for claims arising out in the business and other parties can also sue company.
  2. In case of companies which are listed any person can become part owner of the company by purchasing the shares in the stock market and be entitled for share in profits and also has the voting rights.
  3. The liability in case of company shareholders is limited to the extent of stocks purchased by them and creditors of the company cannot demand their money from personal assets of the shareholders.
  4. A company is immortal in the sense that death of any member of shareholder does not result in closing down of the organization; it keeps running until it is dissolved or declared bankrupt by the courts. This feature of company is also perpetual succession.
  5. A company is managed by board of directors which are elected or appointed by the members or shareholders of the company.
  6. Company which is successful over the years tends to create a brand name for itself and people recognize the company from its brand name rather than the name of the owner or promoter who started the business. For example companies like Pepsi, Microsoft, Toyota, Samsung etc…, are known by their name rather than their promoter’s name.
  7. A company is required to comply with various statutory regulations of government like payment of taxes on time, not doing activities which results in deterioration of the environment, auditing and publishing the results regularly and so on.
  8. A company should also have a registered office so that all communications can be done through that office only and also it should have common seal so that it can be affixed on all important documents as company is only artificial person and in order to authorize the acts it needs common seal.


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